New mortgage start-up puts pressure on traditional lenders with interest rate cut

Non-bank lender Núa Money is cutting mortgage rates in a move brokers said would keep competitive pressure on the bigger institutions.

Núa Money, which started mortgage lending here only last year, is dropping its rates by up to 0.75 percentage points.

Núa is a mortgages start-up backed by the Allen beef barons of Wexford.

It secured a licence from the Central Bank earlier last year and started ­offering mortgages through brokers last July.

Núa Money is not directly funded by deposits, unlike the majority of Irish mortgage lenders, so its rates tend to be a bit higher than some of its competitors.

It has cut its rates for first-time buyers, movers and switchers.

This has reduced the five-year fixed rate for those borrowing 60pc or less than the value of the home from 4.5pc to 3.75pc. For those with a higher loan to value, the rate comes down from 4.6pc to 4.05pc.

Its lowest three-year fixed rate had been reduced from 4.6pc to 3.85pc, Núa’s chief commercial officer Fergal O’Leary said.

The lender has also reduced the rates on its equity release products.

Mortgage broker Michael Dowling, of Dowling Financial in Dublin, said the rate reductions announced by Núa would bring them more in line with what was now available on the market.

“However, they are only offered to customers borrowing up to 70pc loan to value, which will exclude the majority of first-time buyers.”

He said the reductions would mean that a couple taking out a €300,000 mortgage on a 35-year term on the new rates would save €135 a month.

“Núa Money is a new player to the market and its service offering is light years ahead of what is available from any mainstream lender,” he said.

He said that Núa Money had had an impact, but as first-time buyers accounted for 60pc of all new mortgage completions, Núa needed to review its rates for this segment of the market.

The Núa rate reduction comes after the other recent new entrant to the market, MoCo, cut its rates in December.

MoCo, which is owned by Austrian bank Bawag, cut its fixed rates to as low as 3.6pc. It also offers cash-back of €1,500 to purchasers and switchers.

Martina Hennessy, managing director of online broker Doddl.ie,

said both lenders were “leading the charge on ­digital mortgage origination, significantly ­cutting mortgage approval times to just hours as compared to the traditional lenders who can still take weeks”.

Ms Hennessy said the new lenders were offering competition to AIB, Bank of Ireland and PTSB.

“As these broker-only lenders become more competitive on pricing, their innovation on product and mortgage origination offers much-needed choice to Irish mortgage consumers.”

Credit unions are expected to be more competitive in the mortgage space from this year. New lending limits could enable them to triple their current mortgage loan books to more than €2bn in coming years.

Meanwhile, digital bank Revolut is promising to enter the mortgage market in this country later this year.

Source: Charlie Weston, Irish Independent, 8th February 2025